HUB24's (ASX:HUB) proactive decision to in-house its trustee suggests it is already moving in line with the direction of regulation, Jarden said in a note on Monday.

Australian Prudential Regulation Authority's (APRA) imposition of additional license conditions on HTFS Nominees, the trustee of the HUB24 Super Fund, which the firm is in the process of acquiring from EQT Holdings, marks a step up in regulatory scrutiny on platform trustees.

Jarden expects modest cost impact and limited direct flow risk, with the more likely material consideration to be sentiment, considering the impact of sector-wide regulation, even as the rising compliance floor should ultimately benefit scale operators.

With APRA signalling possible changes to prudential standards, HUB24 and other platforms are potentially susceptible to multiple compressions.

The investment firm retained its buy rating on HUB24 and reduced the price target to AU$110.40 per share from AU$115.30 per share.